Ethical Decision Making Model

An ethical decision making model helps executives make the best possible strategic decision.

Why?

Because decision making success depends on both:

Decision quality

Execution effectiveness

Note One: We are talking about strategic decisions – as opposed to tactical decisions that executives make every day, where the effect on the organization is relatively minor. On the contrary, a strategic decision has a considerable impact on the performance of the company.

Note Two: We are talking about an ethical decision making model as a tool for executives – together with their corresponding teams – to help them make the best possible strategic decision every time. We define a team as a group of people made up by the boss and her direct reports within an organizational context.

Decision quality: in ethical decision making model

When the decision is not ethic – when an ethical decision making model is not used – it means that the decision is aligned with particular self-serving interests of one person or one group of people, but not with organizational results, not with the company’s strategy, not with all the organization’s stakeholders (employees, customers, stockholders, suppliers, community, etc.)

An executive’s compass is always the organizational results – which are aligned 100 per cent with the strategy. When organizational results are reached, every member of the company wins – when a decision is ethic, it is aligned with such results.

Execution effectiveness:

When a decision is ethic – when an ethical decision making model is used – it is much more likely to involve the hearts and minds of the people who will execute such decision – because they all know that such decision is in the best interest of everybody.

On the contrary, when a decision is not ethic, people are less likely to commit to the decision; they are less likely to take responsibility for its execution.

Decision quality:

In today’s global market where there are too many variables for one single top executive to consider in order to make the best possible strategic decision, it is mandatory to consider as many beliefs, perspectives, concepts, etc., as possible.

Hence, the quality of a strategic decision depends on the diversity of ideas considered to make such decision.

However, the more ideas and perspectives are considered to make a strategic decision, the more conflict is likely to emerge in the decision making process.

Execution effectiveness:

If the people in charge of executing the decision made commit themselves to such decision, the execution is more likely to be effective.

On the contrary, if the people in charge of executing the decision made do not commit themselves to such decision, the execution is less likely to be effective.

Decision quality:

Candor feeds the richness and diversity of ideas. There is more diversity of ideas if candor is part of the culture of the people in charge of making the strategic decision. However, if candor is not part of the culture, it is less likely that there will be diversity of ides, and as a consequence of this, the quality of the strategic decision is likely to be poorer.

Execution effectiveness:

Three ingredients feed commitment:

Clarity of understanding that the decision making process is ethical – team members must perceive that the decision making process is both fair (everybody in the team has an equal chance to participate and influence the final decision), and clean (not corrupted – team members must perceive that the decision making process is for the good of the organization, not for the good of just a few members of the organization). Hence, the relevance of the ethical decision making model.

Clarity of understanding of the logic behind the decision – participants need to understand why it is the best decision, even if they don’t agree with it.

Clarity of understanding of the decision made – team members need to clearly understand what was agreed (what, when, who, how, etc.)

When people clearly understand all these three dimensions of the decision making process, they are more likely to commit to the decision made.

And vice versa, when team members don’t understand the why of the decision, the process by which the decision was made, and the decision itself, they are less likely to commit themselves to the decision made.

Nevertheless, the more conflict there is (because of the diversity of ideas), the less likely it is that people will clearly understand the decision made, which will in turn reduce the commitment to whatever it is decided.

Diversity of ideas depends on candor.Commitment depends on clear understanding.

On one hand, more diversity of ideas increases the likelihood that there will be conflict; on the other, conflict decreases the likelihood that there will be understanding – and commitment.

So how do you resolve this dilemma?

You resolve this dilemma by making a distinction: You must distinguish between affective conflict and cognitive conflict.

Affective conflict is personal and destructive – it doesn’t lead anywhere.

Cognitive conflict is rational and constructive (it lives in the world of ideas, it is not personal). Cognitive conflict helps you seed breakthrough ideas – it facilitates both candor (diversity of ideas to improve the quality of the decision) and clarity of understanding (to build commitment to the decision made).

You, as the boss of your direct reports – especially if you are the CEO – you must do two things simultaneously in your ethical decision making model:

First:

If you want your team to take the best possible decision, you must earnestly nourish cognitive conflict within your team – you must make sure everybody speaks up, particularly if there are disagreements within your team.

Second:ethical decision making model

You must make sure the conflict that takes place within your team doesn’t become affective conflict; and if it ever does – which is likely to happen – make sure people genuinely apologize to each other, and then move on.

Note: Before you use this ethical decision making model and for the health of your own team (you and your direct reports), make sure everybody understands both: the benefits of this decision making process, and the ground rules. Ground rules refer to the agreements your team must make before your team uses this decision making model. For example: what exactly will your team do when cognitive conflict becomes affective conflict? Etc. Ground rules are extremely important.

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TRUST

Candor and cognitive conflict are key elements of this managerial decision making process. But how do you facilitate engaging cognitive conflict and the creation of legitimate candor within the culture of your team?

Trust is the foundation of both – without it, your team won’t ever enjoy frankness or constructive conflict. Without trust, your team won’t ever be a high performing team – trust is an indispensable ingredient for organizational performance. It’s that simple.

And … how do you create trust inside your team’s culture?

The answer my friend is inside yourself as the boss of your direct reports – the answer is found within your own behaviors:

You must be authentic, you must have integrity, and you must be humble. If you haven’t done so, please read the
three essential leadership characteristics
web page to understand what they are within an organizational context, their direct relationship with your team’s results, and their impact on organizational performance.

Authenticity, integrity, humility, trust, frankness, etc., don’t have anything to do with the touchy-feely world. On the contrary, they are specific, observable, and effective behaviors that have everything to do with organizational results, with your company’s performance, and with the bottom line.

Ethical Decision Making Model

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